Gold Surging Higher, A Glimpse over Ten ASX Gold Stocks

  • Feb 05, 2020 AEDT
  • Team Kalkine
Gold Surging Higher, A Glimpse over Ten ASX Gold Stocks

The year 2019 was a successful year for gold bulls, with LME gold price surging by ~19% from US$1282.3/oz on 2 Jan 2019 to US$1521.9/oz on 31 Dec 2019. The rally continued come 2020, depicting surge of ~3% from US$1525.5/oz on 2 Jan 2020 to US$1583.5/oz on 3 Feb 2020. The gold prices are supported by global turmoil and uncertainty.

In the milieu of which it is pertinent to glance through the gold stock vis-à-vis operations to understand the performance of the Australian gold companies. For the same, stocks were selected based on the market cap from A$100 million to A$10 billion comprising of exploration to producing and regional to global presence gold companies.

The stocks chosen are in ascending order of market cap are LLO, DCN, RED, ALK, WGX, RSG, OGC, AQG, RRL and EVN. Their performance over the last month is given below: -

Source: Australian Stock Exchange

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Lion One Metals (ASX:LLO) is a Canadian based multi listed company focusing in advancing its low cost, high-grade underground Tuvatu Gold Project in Fiji. It is listed in Canada, Australia, USA and Europe.

LLO has all the mandatory regulatory approval for the development and processing of Tuvatu operation, including renewable mining and surface lease of ten and twenty-one years, respectively.

The share price traded at A$1.88 on 4 January 2020. Its 52 weeks high and 52 weeks low stand at A$2.04 and A$0.450, respectively, and has a market cap of A$195.01 million.

Dacian Gold Limited (ASX: DCN) is a gold producer company and set to become the next Australian mid-tier gold miner focusing its Mount Morgans Gold Operation in Western Australia.

The company achieved its H1 2020 guidance to produce 75,237 oz of gold at AISC of A$1562/oz. FY20 total production guidance is ~ 150,000-170,000 oz of gold at AISC of A$1,450-A$1,550/oz.

The stock of DCN last traded at A$1.4 on 31 January 2020 and trading is on suspension from 3 Feb 2020 due to the pending release of ore reserves. It has a P/E ratio of 100 and EPS of A$ 0.014. Its 52 weeks high and 52 weeks low stand at A$2.88 and A$0.375, respectively, and has a market cap of A$319.8 million (last traded value).

Red 5 Limited (ASX:RED) is a gold producing company in Australia with a primary focus at Eastern Goldfields of Western Australia.

The gold production during the quarter was stressful than the previous quarter due to the mine sequencing delays. In Dec 2019 quarter the Company produced ~23,346 ounces of gold at A$1,628/oz whereas the Sep quarter the Company reported 28,649 ounces at A$1,476/oz. The FY20 guidance is scheduled to deliver 110,000-120,000oz at an AISC of A$1,350 – A$1,500/oz.

The share price traded at A$0.295 on 4 January 2020. Its 52 weeks high and 52 weeks low stand at A$0.395 and A$ 0.099, respectively, and has a market cap of A$373.53 million.

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Alkane Resources Limited (ASX:ALK) is an Australian listed multi-commodity exploration and development company. The assets are primarily located in the Central West region of New South Wales.

The gold production during the Dec quarter was 6,929 ounces, over the target guidance of A$1024/oz of cash cost and A$1441/oz of AISC. The cost producing per unit of gold was higher than its peer attributable to the ongoing construction activities such as recent commissioning of stope at Tomingley gold operations. The FY20 guidance remains unchanged at 30,000 to 35,000 ounces of gold at an AISC of A$1,250 to A$1,400/oz.

The share price witnessed tremendous increment by 29% from A$0.63 on 3 Jan to A$0.81 on 3 Feb 2020 may be due to the positive work toward the Tomingley UG and Dubbo Project. The stock closed by A$0.82 on 4 Jan 2020 with a P/E ratio of 17.61 and EPS of A$0.046. Its 52 weeks high and 52 weeks low stand at A$0.864 and A$0.185, respectively, and has a market cap of A$469.83 million.

Westgold Resources Limited (ASX: WGX) is an Australian listed gold producer set to become one of the significant producers in the country. It has commissioned three production facility and operates Fortnum Gold Project, Murchison Gold and Cue Gold Operations in Western Australia.

The Dec quarter witnessed a shortfall of 4.345 koz of gold production, i.e. 62.655 koz than the guidance of ~67 koz at low cash cost and AISC by 7% and 2% to A$1143 per ounce and A$1361 per ounce, respectively. The guidance for FY20 is set at ~275-300 koz of gold with a cash cost of ~A$1,175-1,230/oz and AISC of ~A$1,370-1,420/oz.

The share price witnessed a fall of ~10% from the last maximum of A$2.36 on 23 Jan to 3 Feb 2020 may be due to the Castile demerger. As on 4 Jan 2020 it was trading at A$2.11 trading closer to its 52 weeks high, i.e. A$2.57 while, its 52 weeks low stands at A$0.95. It has a market cap of A$851.3 million.

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Resolute Mining Limited (ASX: RSG) is an Australian listed explorer, developer, and operator of gold mines. The RSG assets are present in Australia and Africa.

The guidance for FY20 is set at 500 koz, i.e. 30% more than previous year gold production due to the upcoming production from Syama sulphide mine and Ravenswood expansion project. Even the AISC is expected to improve by US$110/oz from the previous year to US$980/oz in FY20.

The share price witnessed a fall of ~13% from the maximum on 3 Jan to 3 Feb 2020 may be due to the announced issues in sulphide circuit of Syama Gold Mine. As on 04 Jan 3030 it is trading at A$1.115 with 52 week high and low prices standing at A$2.12 and A$0.965, respectively. It has a P/E ratio of 26.11 and EPS of A$ 0.043 with a market cap of A$1.16 billion.

OceanaGold Corporation (ASX:OGC) is a gold exploration, developer and producing company with a global presence. It is listed on Australia’s ASX and Canada’s TSX.

The margin in FY19 fell (difference of realised price and AISC) by ~40% from previous financial year due to the increased activities to sustained operation at higher ramp-up at the Haile and Waihi gold mine. However, the production of FY19 achieved in line with target guidance.

The share price surged by 13% post the announcement of Dec quarter update and presently trading at A$2.9 on 4 Jan 2020. The OGC has a P/E ratio of 19.42 and EPS of A$0.158 with an annual dividend yield of 0.34%. Its 52 weeks high and 52 weeks low stand at A$4.93 and A$2.49, respectively, and has a market cap of A$1.9 billion.

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Alacer Gold Corp (ASX:AQG) is a low-cost gold producer with a primary asset located in Turkey. The company owns 80% of world-class Çöpler Gold Mine operated by Anagold Madencilik Sanayi ve Ticaret A.S.

The Company achieved its FY19 target guidance and produced ~391.213 koz of gold. And for FY20 the production guidance is set at ~310 to 360 koz at US$550 to 600/oz cash cost and AISC at 735 to 785/oz.

The AISC is expected to increase by ~ US$25-75/oz in FY20 due to anticipated lower future production in the H1 2020 because of scheduled shutdowns of autoclave and ramp-up of sulfide plant. Also, increased in exploration expenditure expected around Çöpler and Çakmaktepe mine followed by the construction of TSF lifts, heap leach pad expansion and sulfide plant optimization.

The share price witnessed a fall of ~13% from the maximum on 8 Jan to 3 Feb 2020 may be due to the turmoil over U.S. and Iran and anticipation of production fall in FY20. It presently traded at A$6.58 on 4 Jan 2020 which falls more on the side of its 52 weeks high, i.e. A$8.44 where its 52 weeks low stand at A$3.175. It has a P/E ratio of 85.64 and EPS of A$ 0.08 with a market cap of A$2.05 billion.

Regis Resources Limited (ASX:RRL) is an Australian listed company with a primary focus on exploration and production of gold mines. It has developed a mid-sized gold project across Africa and Australia.

The Dec quarter operations witnessed the surge in cashflow by A$17.5 million to A$100 million from the previous quarter. The gold production for the quarter was 90,849 oz at A$866/oz of cash cost and A$1,234/oz of AISC. The FY20 guidance remains unchanged at 340,000-370,000 oz.

The share price fell by 6% post the announcement of Dec quarter update and it corrected and presently trading at A$4.41 on 4 Jan 2020. The RRL has a P/E ratio of 13.98 and EPS of A$0.322 with an annual dividend yield of 3.56%. Its 52 weeks high and 52 weeks low stand at A$6.72 and A$4.005, respectively, and has a market cap of A$2.29 billion.

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Evolution Mining Limited (ASX:EVN) is an Australian listed gold producing company with assets spread across Queensland followed by New South Wales and Western Australia.

During Dec quarter 2019, gold production of 170.890 koz is achieved with AISC A$1,069/oz. As of H1 2020, 50% of guidance has been met and expected to attain the remaining gold production easily. The FY20 advice for gold production remains unchanged with ~725koz at AISC of ~A$920-990/oz.

The share price closed at A$3.79 on 4 Jan 2020 and has a P/E ratio of 29.7 and EPS of A$0.129 with an annual dividend yield of 2.49%. Its 52 weeks high and 52 weeks low stand at A$5.585 and A$3.04, respectively, and has a market cap of A$6.51 billion.


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